Lindblom - The Market System - Afghan Journalists' Committee

Enterprise and Corporation 79fails, that is the limit of their liability. Governments havegranted this and other privileges, like interlocking of governingboards in order to improve the prospects of corporations.Governmental motives to help are mixed: they rangefrom a predatory desire of officials to enrich themselvesto statesmanlike intentions to stimulate desirable investments.One suspects that the grants of privilege have far exceededexpectation. In any case, they have made enormousenterprises attractive to investors and entrepreneurs. Researchersof corporate history are greatly divided on the relativeimportance of the factors that explain the growth oflarge corporations. The dispute is especially severe betweenthose who find efficiency to be predominant and those whofind monopolistic aggrandizement together with corporatepolitical influence to be predominant. Whatever one thinkson that issue, enterprises do grow; and internally they requiremanagement beyond what the market system canprovide. One can think of the world of corporations as aworld of planned systems, coordinated with one anothernot by a plan but by the market system.Forms of OwnershipFor at least one hundred years, the great issue in how to controlthe enterprise was private versus government ownership.Socialists believed in government ownership, and thatbelief defined socialists. Socialists also wanted government-ownedenterprises to be taken out of the market systemto operate under a hierarchy of political controls—democratic socialists specifying, of course, that the controlsbe democratic. Market controls, many socialists thought,were not controls at all but a confusion of self-interests.Slowly they learned that the market is indeed a system of